Stable office vacancy good news for Gold Coast

Office vacancy rates on the Gold Coast have stabilised at 15.2 per cent according to the Property Council of Australia’s Office Market Report.

Over the 6 months to July 2014, the Gold Coast market experienced a six year low in office vacancy and recorded its highest demand for office space since the onset of the GFC, says Chris Mountford, Queensland Executive Director of the Property Council of Australia.

“The good news is that this strong demand for office space continued in the 6 months to January 2015,” Mr Mountford says.

“A further 7,200 square metres of office space was absorbed in the last 6 months of 2014.

“This is a clear indication of increased confidence in the region, and provides a stable base for future activity.

“However, the vacancy rate rose by 0.2 per cent over this period as a result of 10,015 square metres of new office space entering the market.

“The region also no longer has the highest vacancy rate in the country. Both the Brisbane CBD and Canberra now have higher office vacancy rates than the Gold Coast with 15.6 and 15.4 percent respectively.

“The Gold Coast continues to boast a modest supply pipeline, with only 4,624 square metres due to come online this year and around 3,196 square metres due in 2016.

“With confidence returning to the coast, and the Commonwealth Games now looming large on the horizon, there is certainly an optimistic outlook for the office market in the coming years.

“However, the Gold Coast office market is strongly segregated by locale. Surfers Paradise has again recorded a vacancy above 25 percent. This is in stark contrast to the region’s best performing sub-markets Broadbeach and Robina-Varsity Lakes which recorded vacancy rates of 7.6 and 10.4 per cent respectively.

“Interestingly vacancy in Southport rose slightly from 14.2 to 14.8 per cent. With Southport now designated as a Priority Development Area, this market will be interesting to watch over the coming 12 to 18 months to see if the designation fast tracks demand and renewal.

 

 

For further comment:

Chris Mountford QLD Executive Director Ph: 07 3225 3000 or 0408 469 734	John Nguyen National Research Manager Ph: 02 9033 1943 or 0410 449 210

 

Attached: Further vacancy analysis

 

Analysis & Commentary, Gold Coast, January 2015

Headline comments:

• Vacancy in the Gold Coast office sector increased slightly over the six months to January 2015
• This was due to supply additions
• Only the B Grade segment experienced negative demand over the period
• All locales experienced positive demand except Southport

Vacancy analysis:

• Vacancy increased from 15.0 percent to 15.2 percent over the 6 months to January 2015
• The vacancy increase was due to 10,015sqm of supply additions
• Demand was still positive with 7,200sqm of net absorption recorded

By grade:

• A Grade – vacancy in this segment decreased slightly from 19.0 percent to 18.9 percent
• B Grade – vacancy increased from 11.2 percent to 15.5 percent due to 7,808sqm of supply additions and -1,227sqm of net absorption
• C Grade – vacancy in this segment decreased from 15.4 percent to 11.6 percent due to 5,238sqm of net absorption
• D Grade – vacancy decreased from 21.6 percent to 12.9 percent due to 1,316sqm of net absorption

By locale:

• Broadbeach – vacancy decreased from 8.8 percent to 7.6 percent due to 352sqm of net absorption
• Bundall – vacancy increased from 16.9 percent to 18.0 percent due to 8,163sqm of supply. Demand was positive with 5,853sqm of net absorption recorded
• Robina-Varsity Lakes – vacancy increased from 9.8 percent to 10.4 percent due to 1,852sqm of supply. Demand was positive with 902sqm of demand recorded
• Southport – vacancy increased from 14.2 percent to 14.8 percent due to -938sqm of net absorption
• Surfers Paradise – vacancy decreased from 26.6 percent to 25.1 percent due to 1,031sqm of net absorption

Future supply:

• 4,624sqm of space is due to come online in 2015
• 3,196sqm of space is due to come online in 2016
• A total of 4,924sqm of projects are mooted

Key market indicators, Gold Coast (aggregate)

Grade	Vacancy, Jan 15 (%)	Vacancy, Jul 14 (%)	Net absorption, 6 months to Jan 15 (sq m)	Net absorption, 12 months to Jan 15 (sq m)
A	18.9	19.0	1,873	4,928
B	15.5	11.2	-1,227	4,108
C	11.6	15.4	5,238	7,140
D	12.9	21.6	1,316	659
Total	15.2	15.0	7,200	16,835

Key market indicators, Gold Coast (by locale)

Locale	Vacancy, Jan 15 (%)	Vacancy, Jul 14 (%)	Net absorption, 6 months to Jan 15 (sq m)	Net absorption, 12 months to Jan 15 (sq m)
Broadbeach	7.6	8.8	352	1,204
Bundall	18.0	16.9	5,853	9,229
Robina-Varsity Lakes	10.4	9.8	902	3,642
Southport	14.8	14.2	-938	-1,754
Surfers Paradise	25.1	26.6	1,031	4,514

 

More information available at www.propertyoz.com.au/officemarketreport

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